How Being More Energy-Efficient is Resulting in Tax Breaks for UK Data Centers

How Being More Energy-Efficient is Resulting in Tax Breaks for UK Data Centers

Posted by
Global 1 Resources
on February 18, 2015

Computer server racks require a notorious amount of energy
to run on a daily basis. In fact, it's estimated that electricity costs make up
as much as a third of a data center's operating costs.

So in a move to encourage greater energy-efficiency among its data centers, the
UK is now offering near-total energy tax exemption for about 100 data centers
that have committed to decreasing their server rack enclosures' energy usage.

According to a January 16 Data Center Knowledge article, major data
center operators like Digital Realty, CenturyLink Technology Solutions and IBM
all qualify for exemption under the UK government's climate change initiative,
the Climate Change Agreement. If these data centers significantly slash their
energy consumption, they will see their energy tax rate cut by as much as 90%.

The tax exemption is intended to allow the UK's data centers to stay
competitive with foreign data companies, the article reports.

Technically, the Climate Change Agreement exemption plan has been in place
since 2001, allowing 50 or so industries to get a tax break in exchange for
reducing their energy use -- but the data center industry was never eligible
for this incentive until the Climate Change Agreement for Data Centers was
passed last summer.

According to Data Center Knowledge, data centers that qualify for the
tax break are required to commit to reducing their energy consumption by 30% by
the year 2020. The computer server racks' energy-efficiency will be measured in
Power Usage Effectiveness, the ratio between the amount of power consumed by IT
to the data center's total power consumed.

At the qualifying data centers, work has already begun to boost
energy-efficiency. By replacing old cooling systems with free air cooling
schemes, data centers are able to regulate their computer server racks'
temperatures with the help of natural, renewable resources, for example.

As more data centers jump on the chance to get a tax cut, the UK might just
become one of the leading countries for energy-efficient information storage.

What are your thoughts on the UK's tax break initiative? How do you
encourage energy-efficiency at your data center? Share your thoughts and
opinions with us in the comments below!